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Consider two bonds, A and B. Both bonds presently are selling at their par value of $1,000. Each pays interest of $60 annually. Bond A
Consider two bonds, A and B. Both bonds presently are selling at their par value of $1,000. Each pays interest of $60 annually. Bond A will mature in 5 years, while bond B will mature in 10 years. If the yields to maturity on the two bonds change from 6% to 8%, a) both bonds will increase in value but bond B will increase more than bond A b) both bonds will decrease in value but bond A will decrease more than bond B c) both bonds will decrease in value but bond B will decrease more than bond A d) both bonds will increase in value but bond A will increase more than bond B e) both bonds will not change in value
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